When I got my kids a dog, I had no idea that it could affect my homeowners insurance. I happened to run into my insurance agent in the store when I was buying dog food and he asked me what kind of dog we had. When I told him, he said I should stop in the office the next day. I had no idea that things like this could affect premiums, so I started asking what else could do it as well. I created this site to help others understand some of the finer points of homeowners insurance and what they should think about to manage their rates.
Many people who have never owned a home don't understand how homeowners' insurance works. As a prospective homeowner, you need to brush up your knowledge of homeowners insurance since it will be a critical part of your home ownership. Below are some of the essential things you should know about home insurance.
Factor Insurance Costs into Home Ownership Costs
Home insurance is necessary and good, but it doesn't come cheap. The exact rates depend on various factors such as the location of the home, the size of the home, the construction, and even the value of the home's contents. Home insurance payments can range from a few hundreds of dollars to over two thousand dollars per year. When calculating your home ownership costs, don't forget to include home insurance payments.
Know That Coverage Might Be Mandatory
Even if your budget is tight, you must find a way to squeeze in home insurance if you are buying your home on a mortgage. This is because adequate insurance coverage is one of the conditions mortgage lenders have for their clients. The lender can lose money if you default on your mortgage payments, your home gets damaged, and you don't have coverage.
Consider Your Future Needs
Another thing you should note is that the factors that determine insurance coverage change with time. Many people renovate or remodel their homes a bit after purchase. For example, if you are planning to extend the house or install an above-ground swimming pool, find out how such alterations will affect your home insurance.
Learn The Property's Insurance History
Before you buy a property, get the CLUE (Comprehensive Loss Underwriting Exchange) report to learn the property's insurance history. This is crucial because a property's insurance past may affect its insurance future. The report contains details of past claims, the types of losses, and even the denied claims. Home insurance companies tend to be wary of properties with numerous claims in their past. You may have a problem finding cheap coverage or any coverage at all if you buy such a property.
Understand the Limitations of Basic Coverage
Lastly, you should know that basic home insurance doesn't protect you against all risks. Typical exclusions include earth movements (such as earthquakes), flooding, and water damage. If you want complete protection, you may have to buy additional coverage or riders to your standard policy. Your home insurance agent can also tell you about the various types of coverage beyond the basic one.
Share27 June 2019
